NEWS BUSINESS REPORTER
Updated: 09/09/07 7:29 AM
Paul McAfee is a big believer in the potential of small businesses. Now he is offering start-ups a place to roost and receive professional guidance.
The public relations and advertising agency he leads, eXubrio Group, is setting up a business incubator in Kenmore, designed to help earlystage companies develop.
The eXubrio Group incubator will offer inexpensive space, in the range of $10 per square foot, including utilities and some services. But McAfee said low-cost space is not the main reason start-ups go into incubators.
“What they’re really interested in is knowledge and skills and networking,” said McAfee, 59, chief executive officer of eXubrio. His company will provide advice in areas like public relations and Internet marketing.
Ideally, incubators offer budding companies a combination of low expenses, access to shared services or technologies, and connections with experts and other emerging entrepreneurs. Businesses that succeed “hatch” and move out, adding jobs and investment to the local economy.
The University at Buffalo’s incubator, which has a technology focus, has been around for nearly two decades and is preparing to expand. The Batavia Industrial Center, which is regarded as the nation’s first incubator, turned a vacant factory into a complex packed with small businesses.
More are coming. The Buffalo Economic Renaissance Corp., the city’s economic development arm, will turn a former library on Jefferson Avenue into an incubator with six office spaces. And in North Tonawanda, a real estate company plans to convert a former factory into an incubator with lofts.
People who run incubators say the format improves start-ups’ chances of success. The National Business Incubation Association says that 87 percent of companies that “graduate” from incubators are still in operation five years later. Nationally, more than 1,100 incubators are operating, the vast majority of which are run as nonprofit organizations.
McAfee said he is looking forward to working closely with start-ups that move into the Kenmore incubator, inside Delaware Audio Visual’s former home at 1517 Kenmore Ave. The building consists of about 40,000 square feet, only about one-third of which is currently occupied.
The eXubrio Group incubator is offering new tenants their first two months of rent for free, to let them try the setting. But McAfee’s pitch goes beyond rental space: He says he and eXubrio’s president and chief information officer, Robert Klingensmith, 25, can offer tenants free or low-cost services in areas like marketing strategy development, advertising, public relations, Internet marketing and Web site development.
Such services are often too expensive for small start-ups to afford but can be valuable to their growth, McAfee said.
A few organizations already operate in the building, giving the incubator program a trial run. Charlie Bray uses it as home base for his SumoKids Foundation. The program teaches the principles of Sumo wrestling to young people, to help them grow and achieve more in the classroom. He plans to bring it to a Buffalo city school this year.
Bray, a former pro football player, said McAfee and Klingensmith gave his organization a boost. “They have helped me so dearly,” he said. “I’m really appreciative of them.”
EXubrio Group has provided SumoKids with office space as well as services such as Web site development, technical support and marketing and business consulting, McAfee said.
Bray’s goal is to establish a SumoKids chapter to serve the Buffalo area, which would allow him to focus on expanding the program into other regions. He hopes to add a few jobs at the Kenmore incubator.
Along with SumoKids, the Kenmore building houses Xtatix, a consumer electronics company that has a presence here and in China.
As the incubator evolves and tenants require space, eXubrio will continue to make improvements to the property, McAfee said.
People who run area incubators describe their tenants as sort of hidden gems in the local economy, with the potential to add to the region’s job base.
UB’s incubator in Amherst, which was built in 1988, has essentially been full for the past two years, said Woodrow “Woody” Maggard, associate vice provost. It has 25 high-tech companies, as well as seven “affiliates” that either want to be in UB’s incubator or just want help with networking and mentoring services.
An expansion is planned that would double the amount of incubator space, but that project would serve two existing incubator tenants that need additional space. And UB has talked about building another incubator downtown in the Buffalo Niagara Medical Campus area.
“We really see these as very effective,” Maggard said. UB’s incubator is part of the Office of Science, Technology Transfer and Economic Research.
Among the incubator’s notable businesses is ONY Inc., a pharmaceutical company that makes a drug for newborns with, or at risk for, respiratory failure.
Other companies that have sprouted at the UB incubator have moved on to their own locations, such as ATTO Technology and AZtech Inc.
Maggard has talked with McAfee about plans for the Kenmore incubator and views the site as complementary to UB’s. It provides another option for budding companies that might not fit the UB incubator’s format, he said.
The Batavia Industrial Center serves a range of businesses on multiple floors of the former Massey-Ferguson complex. Thomas Mancuso, president of the development group, said he hopes to make technological upgrades to the facility, to keep up with the needs of emerging tenants.
With so many small businesses active in the economy, Mancuso says incubators can play an important role in nurturing them with support services and contacts.
“There’s always a need for more of that,” he said.
Bigger businesses that create more jobs with a single announcement tend to attract more attention. But Mancuso sees value in promoting the growth of small businesses, too, even if they take longer to develop.
“These folks are invisible until they show up at a place like this,” Mancuso said.
He sees collective strength in their numbers. “There’s lots of opportunities to get lots of little wins,” he said.
The Mancuso Business Development Group recently signed a contract with the City of Lockport’s development agency to manage and market Commerce Square, the massive former Harrison Radiator plant.
In Buffalo, the BERC hopes to have its Jefferson Avenue incubator open either by the end of this year or early next year, said Tim Wanamaker, BERC’s president.
The location will have shared services, like conference and board rooms, copiers and a receptionist, that will help tenants keep their costs low. BERC also plans to move its Business Resource Center to the site, to provide technical assistance.
Wanamaker envisions the incubator housing start-ups that perhaps have been operating from a home, or are starting from the ground up, but aren’t quite ready to be completely on their own.
“It gives them a professional presence, within a commercial district,” he said.
mglynn@buffnews.com
